Correlation Between First Horizon and NYCB Old

Can any of the company-specific risk be diversified away by investing in both First Horizon and NYCB Old at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Horizon and NYCB Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Horizon National and NYCB Old, you can compare the effects of market volatilities on First Horizon and NYCB Old and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Horizon with a short position of NYCB Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Horizon and NYCB Old.

Diversification Opportunities for First Horizon and NYCB Old

0.0

Correlation Coefficient

First Horizon  NYCB Old

Pay attention - limited upside

The 3 months correlation between First and NYCB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National and NYCB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYCB Old and First Horizon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Horizon National are associated (or correlated) with NYCB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYCB Old has no effect on the direction of First Horizon i.e., First Horizon and NYCB Old go up and down completely randomly.

Pair Corralation between First Horizon and NYCB Old

If you would invest (100.00) in NYCB Old on December 27, 2024 and sell it today you would earn a total of  100.00  from holding NYCB Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Horizon National  vs.  NYCB Old

First Horizon National

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Horizon National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, First Horizon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

NYCB Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NYCB Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, NYCB Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Horizon and NYCB Old

The main advantage of trading using opposite First Horizon and NYCB Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Horizon position performs unexpectedly, NYCB Old can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NYCB Old will offset losses from the drop in NYCB Old's long position.

The idea behind First Horizon National and NYCB Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.